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Income-linked funding pilot seeks to ease Southeast Asia education debt

Global Financing for Education’s Pay It Forward scheme requires repayments of 3.0% to 10.0% of subsequent income for 1 to 10 years, with repayments capped at twice the original funding.

Reported · Written up by our desk · Emerging Markets

A Singapore-based education financing programme is testing whether income-linked funding can expand access to higher education without creating an unmanageable debt load for graduates across Southeast Asia, according to SCMP Economy.

The Global Financing for Education, or GFE, Pay It Forward scheme was publicly launched in September and provides students with funding in exchange for repayments of 3.0% to 10.0% of their subsequent income for one to 10 years.

The programme typically caps graduates’ repayments at twice the original funding amount, shifting risk from students toward the financing pool if employment or earnings are weak.

Economists cited by SCMP Economy said the private-sector structure raises questions about selection criteria, including whether students pursuing lower-earning careers could be excluded.

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